KARACHI: Pakistani President Dr. Arif Alvi filed a reference in the apex court on Tuesday for the revival of Reko Diq, a gold and copper project located in Balochistan province, local media widely reported.
The Reko Diq project in southwestern Pakistan, which hosts one of the world’s largest undeveloped copper and gold deposits, was suspended in 2011 after Pakistan denied a joint venture, the Tethyan Copper Company, comprising Barrick Gold of Canada and Antofagasta Minerals of Chile, a license to develop it.
Pakistan’s Supreme Court blocked Tethyan Copper in 2013 from developing Reko Diq following a court case over how the contract had been awarded.
But Barrick Gold ended a long-running dispute with Pakistan and is set to start to develop the project under an agreement signed earlier this year. As part of the deal, an $11 billion penalty slapped against Pakistan by a World Bank arbitration court and other liabilities are to be waived and Barrick and its partners will invest $10 billion in the project.
In July this year, Barrick Gold also asked the government to get the deal stamped by parliament and the Supreme Court to remove any long term obstacles to the company’s investment in the project.
As per the filed reference, the government will seek “to get validation for the new Reko Diq project deal under Article 186 of the Constitution,” the Express Tribune reported.
Under article 186, the president can obtain the opinion of the apex court resident considers “on any question of law which he considers of public importance.”
The federal cabinet had approved filing a reference in the Supreme Court for the revival of the project in September.
“The reference will be filed after October 9 ... and all the consultations have been completed,” Attorney General Ashtar Ausaf Ali told Arab News earlier this month. “This reference and the agreement [signed with Barrick Gold] will be put before the apex court with the question of whether it negates the earlier judgment of the Supreme Court of Pakistan.”
The federal government plans to seek the court’s opinion on two questions:
“Whether the earlier judgment of the Supreme Court, the Constitution of Pakistan, laws or public policy prevent the federal and provincial governments of Balochistan from entering into the Reko Diq Agreements or affect their validity?’ and ‘If enacted, would the proposed Foreign Investment (Protection and Promotion) Bill, 2022 be valid and constitutional’,” Pakistan’s state-run media APP reported.
The International Center for Settlement of Investment Disputes (ICSID) in 2019 announced a huge award of $5.8 billion against Pakistan in the Reko Diq case, filed in 2012 by Tethyan Copper. Damages included compensation of $4.087 billion by reference to the fair market value of the Reko Diq project at the time of the mining lease denial, and interest until the date of the award of $1.753 billion. The Tribunal also awarded TCC just under $62 million in costs incurred in enforcing its rights and also imposed another fine of $4 billion.
However, in March this year, the government of former Prime Minister Imran Khan signed an agreement with Barrrick Gold to avoid the $11 billion penalty.
The project will be operated by Barrick, which owns 50 percent stakes, while 25 percent shares each will be owned by the Balochistan provincial government and Pakistani state-owned enterprises.
The first production of copper and gold is expected in 2027-2028.
